This entry was posted on Wednesday, October 7th, 2009 at 10:28 am and is filed under Uncategorized.
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I have a problem understanding why taxes create an ongoing need to get dollars. The sole issuer of the dollars has a demand for goods and services for which it pays for with dollars. Recipients of these dollars also have a demand for goods and services for which they use dollars as payment. Why would the imposition of a tax require them to demand more goods and services than usual? Wouldn’t the opposite occur?
Isn’t the public sector demand sufficient to stimulate supply? If not the tax doesn’t help. If it is then the tax is unnecessary unless its to manage inflation, and again that would not be an incentive to acquire more dollars.